Re-flating the economy - Or why Congress needs to get some cajones

[truedelphi]

You can read this entire article over at
http://tinyurl.com/2amcjm

**snip
If somebody is going to be "reflating" the economy by typing up money on a computer screen, it should be Congress itself, the publicly accountable entity that alone is authorized to create money under the Constitution.

The Way Out

Economic collapse has been the predictable end of all Ponzi schemes ever since the Mississippi bubble of the eighteenth century. The only way out of this fix is to reverse the sleight of hand that got us into it. If new money must be pumped into the economy, it should be done, not by private banks for private profit, but by the people collectively through their representative government; and the money should be spent, not on bailing out banks and hedge funds that have lost speculative market gambles, but on socially productive services such as rebuilding infrastructure.

When deflation is tackled by creating new money in the form of debt to private banks, the result is a spiraling vortex of debt and price inflation. The better solution is to put debt-free money into consumers' pockets in the form of wages earned. Workers are increasingly losing their jobs to "outsourcing." A government exercising its sovereign right to issue money could pay those workers to build power plants using "clean" energy, high-speed trains, and other needed infrastructure. The government could then charge users a fee for these services, recycling the money from the government to the economy and back again, avoiding inflation.

Other considerations aside, we simply cannot afford the bank bailouts coming down the pike. If it takes $300 billion to avert a market collapse precipitated by a few failing hedge funds, what will the price tag be when the $400-plus trillion derivatives bubble collapses? Rather than bailing out banks that have usurped our sovereign right to create money, we the people should skip the middlemen and create our own money, debt- and interest-free. As William Jennings Bryan said in a historic speech a century ago:

tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson . . . and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business. . . . hen we have restored the money of the Constitution, all other necessary reforms will be possible, and . . . until that is done there is no reform that can be accomplished.

****Ellen Brown is an attorney and the author of eleven books. Her latest book, Web of Debt, traces how a private banking cartel has usurped the power to create money from the people themselves, and how we the people can get it back. See www.webofdebt.com.

[ayeshahaqqiqa]

1. Ellen Brown for economic advisor!

She has it spot on--and wasn't this the sort of thing Dennis Kucinich was talking about doing? In my dream scenario, he's Speaker of the House, and getting legislation like this enacted starting in January 09.

[RC]

2. That is the sort of program that got us, U.S. out of the Depression.

Too bad we don't have a Democratic Congress to implement it.

http://www.u-s-history.com/pages/h1569.html
Social Issues
The Great Depression
1929-1942


A thirst for change

The electorate clamored for changes. The Republicans renominated Hoover, and the Democrats nominated Franklin D. Roosevelt. His energetic, confident campaign rhetoric promoted something specifically for "the forgotten man" — a "new deal." Roosevelt went on to a decisive victory. At his inauguration in March 1933, Roosevelt declared in his lilting style, "Let me assert my firm belief that the only thing we have to fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."


The nation needed immediate relief, recovery from economic collapse, and reform to avoid future depressions, so relief, recovery and reform became Roosevelt's goals when he took the helm. At his side stood a Democratic Congress, prepared to enact the measures he proposed.

Congress passed a historic series of significant bills, most of which had originated in the White House, in just shy of a whirlwind 100 days. Congress also enacted several important relief and reform measures in the summer of 1935 — sometimes called the Second Hundred Days.

Significant legislation:

# One act created the Federal Emergency Relief Administration to be administered by Harry Hopkins. For relief or for wages on public works, it would eventually pay out about $3 billion.
# Three million young men found work in road building, forestry labor and flood control through the establishment of the Civilian Conservation Corps (CCC).
# The Works Progress Administration (WPA) of 1935 would grow out of the previous two agencies.
# The Emergency Banking Act provided the president with the means to reopen viable banks and regulate banking.
# Another law insured bank deposits up to $5,000, and later, $10,000.
# A new Home Owners Loan Corporation (HOLC) assisted homeowners.
# Farmers who voluntarily decreased the acreage of specified crops could become recipients of subsidies from the Agricultural Adjustment Administration (AAA), set up by the government.
# One particularly significant act created the Tennessee Valley Authority (TVA). The vast, ambitious project, coupled with agricultural and industrial planning, would exploit the great river basin's resources with government dams and hydroelectric plants.

Political Cartoon 1938

Progress was made on the labor front:

# The National Recovery Administration (NRA) came into being through a significant measure in 1933. The NRA attempted to revive industry by raising wages, reducing work hours and reining in unbridled competition. The NRA was ruled unconstitutional by the Supreme Court in 1935; however, the majority of its collective bargaining stipulations survived in two subsequent bills.
# Employees were guaranteed the right to negotiate with employers through unions of their choosing by the Wagner Act of 1935, and it established a Labor Relations Board as a forum for dispute resolution. The act bolstered the American Federation of Labor, and pointed to the inception of the Congress of Industrial Organizations (CIO), another labor movement.
# The Fair Labor Standards Act of 1938 promulgated a 44-hour workweek with time-and-a-half for overtime and pegged a minimum wage of 25 cents an hour. The act also provided that the the hours would drop to 40 and the wage would incrementally rise to 40 cents. In addition, the bill made child labor under the age of 16 illegal.

Relief, recovery and reform also affected the social welfare.

Boys in soup kitchen, Dubuque, Iowa

The U.S. government could reach out in the widest way to alleviate human misery — such was the assumption that underlay the New Deal. Beginning in 1935, Congress enacted Social Security laws (and later amendments) that provided pensions to the aged, benefit payments to dependent mothers, crippled children and blind people, and unemployment insurance.

To fund all the new legislation, government spending rose. Spending in 1916 was $697 million; in 1936 it was $9 billion. The government modified taxes to tap wealthy people the most, who could take it in stride most easily. The rich, conservatives, numerous businessmen — and those who were all three — vigorously opposed the New Deal. But the election of 1936 triggered a nationwide endorsement of FDR, who carried every state except Vermont and Maine.

[truedelphi]

3. The Federal Reserve is simply a legalization of an illegal entity

Because of this entity, the average person has seen their net worth decline steadily since 1977.
Those who wrote the American Constitution worded the document so that CONGRESS, not a Central Bank, would be in charge of the money supply.

A Central Bank requires continual indebtedness, an indebtedness that the Central Bank desires to be constantly in creation.

And of course, one of the best way to keep a populace and its government in perpetual debt is WAR. Any surprise to anyone why this war in Iraq is now estimated to cost between 2 and EIGHT trillion dollars??
There are two reasons why the public is not more outraged -
One) because of women's lib, both marriage partners can work. So on account of two people taking on the burden, the average couple has seen a slight improvement, perhaps, over what was the norm in the 1960's.

Two) The decline has been gradual.

However we are now in a crisis. Since the re-flating of the money supply by the Feds, the dollar is heading toward the same value as toilet paper.

What most Americans do not realize is that the hike in oil per barrel is affecting mainly those of us whose purchasing power is in American Dollars. The Euro is now the standard by which the cost of oil is measured. Since the Euro is stable, Europeans are not being affected as much as we are.

[Greyhound]

4. Have you posted this in GD or other forums?

The mood may be right for more than a few folks to read this.
:hi::shrug::hi:

[truedelphi]

5. It might fly over on the other sites.

Thanks for the encouragement.

Will try it when i am more awake tomorrow.

Carol